Recruiters want certainty from IR35’s successor

More than nine in 10 recruiters say IR35 is ineffective and must be changed to provide more legislative certainty, shows a survey by the Recruitment and Employment Confederation.

Asked what should happen to IR35, only 2.7 per cent of agencies supplying the engineering, interim and IT jobs markets said it should remain on the statute book in its current form.

Almost half said the Intermediaries legislation should be scrapped – without any replacement, while 38 per cent said it must be changed to offer affected parties a more certain tax situation.

In fact, a lack of advance certainty in terms of being ‘in or out’ of IR35 - or it being too ‘open to interpretation’ is the most common complaint from recruiters, the survey found.

The data will be fed into the Office of Tax Simplification, which expects to publish its initial review of IR35 this week ahead of “bottoming out” its recommendations in the spring.

 “IR35 has been an awkward, unsatisfactory attempt to tackle the problem of disguised employment ever since it was set up in 1999,” said the REC’S IT sector chair Jeff Brooks.

“These survey results make it plain that the recruitment industry would not accept anything less than a serious overhaul of the current system.”

He added that if contractors, end-users and recruiters could be certain in advance of whether they were within IR35 or not, “many of the current problems could be eliminated.”

Tuesday 8th March 2011